Technology adoption is rising and making way for new players in the industry. Data from Statista.com has shown that emerging technologies are being adopted by 90% of companies. This is largely led by cloud computing and big data, but robotic process automation and the Internet of Things also follow closely.
With such a promising landscape, it’s a great time to launch a tech LLC. The question is – how does one go about starting one in 2023?
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Starting an LLC
Although there are obviously specifics that differentiate tech startups from standard companies, the basics you need to start with are generally the same for this type of business structure. You can stick to the following steps laid out by the guides to starting an LLC by LLC.org’s. These are the general requirements you can usually expect, but you can also check the guides per state to make sure you meet the exact criteria set by declare the state in which you intend to begin your firm.
Meet LLC Naming Requirements
There are general naming conventions that come with tech companies, especially when you are trying to be disruptive in a populated space. If you’re going to launch as an LLC, you are required by law to include “Limited Liability Company” or any variation of its abbreviations in your official name when registering. It’s also important to avoid any names that can be misconstrued as medical, legal, or government bodies. Finally, you will likely want to come up with a unique name that not only matches LLC requirements but also adequately differentiates you from the competition.
File Articles of Organization
In order to formally operate an LLC, you will need to file Articles of Organization. This can be done in person, but the easier route is to simply finish everything online. You should be able to find the right forms on your Secretary of State’s website. Certain states have alternative names for this, like a Certificate of Formation. Functionally though, this should serve the same purpose.
Get a Registered Agent
Every LLC is required to have a registered agent who resides and works in the same state where the business is going to operate. The registered agent’s role is to receive service of process in representation of the business. You can appoint an employee but you can also opt for a commercial service that assigns a designated agent with their own office address. The latter is a recommended route to take for privacy and safety reasons, especially as cbsnews.com reports a growing number of small businesses throughout New York getting flooded with hate mail from malicious senders.
Apply for an EIN
You need to apply for an Employer Identification Number so that the Internal Revenue Service (IRS) can officially identify you for tax purposes. This is especially crucial if you plan to open a business bank account, get certain business permits, and employ workers.
What You Need to Start a Tech LLC
Once you’ve got the basics covered, you will need to take some specific steps as a tech company.
Get Tech-focused Funding
Knowing ’How to Accelerate the Growth of Your Startups’ will be essential if you want your LLC to thrive past its first year. Consider any grant options that may be in your favor depending on your status, the product or service you are creating, and where you are going to launch. There is plenty of tech-focused funding specifically created to motivate entrepreneurs to innovate. Some of the biggest funding resources for tech LLCs come from SBIR grants, crowdfunding, and venture capitalist investment.
Permits and Licensing
You need more than a general business license and zoning permit depending on the specific tech you are dealing with. You will particularly need certain licenses if you are going to deal with software. There are plenty of regulations in this arena, especially if you are planning to export any of your resources to other countries.
Establish Digital Security
Small businesses are being targeted by cybercriminals every day. This risk becomes even higher when you are primarily focused on tech. As such, you will also need to get your digital security in order before you even launch officially. It’s the only way to ensure that your sensitive data and network don’t get compromised because you waited too long to prep. If you read up on the ‘Three Steps to Immediately Boost a Company’s Digital Security’, the first is to establish a secure corporate network that is protected from digital threats.